We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Why Is Rockwell Automation (ROK) Up 9.9% Since Last Earnings Report?
Read MoreHide Full Article
A month has gone by since the last earnings report for Rockwell Automation (ROK - Free Report) . Shares have added about 9.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Rockwell Automation due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Rockwell Automation reported adjusted earnings per share of $3.04 in fourth-quarter fiscal 2022 (ended Sep 30, 2022), surpassing the Zacks Consensus Estimate of $2.94. The bottom line surged 30% year over year on higher sales, which was somewhat offset by a higher tax rate and unfavorable currency impact.
Including one-time items, earnings came in at $2.91 per share in the fiscal fourth quarter compared with the prior-year quarter’s 67 cents per share.
Total revenues were $2,126 million, up 17.6% from the prior-year quarter. The top line beat the Zacks Consensus Estimate of $2,113 million. Organic sales in the quarter were up 20.5% and acquisitions contributed 1.9% to sales growth, while currency translation had a negative impact of 4.8%.
Operational Update
The cost of sales increased 14% year over year to around $1,240 million. Gross profit rose 23% year over year to $886 million. Selling, general and administrative expenses inched up 0.3% year over year to $449 million.
Consolidated segment operating income totaled $495 million, up 53% from the prior-year quarter. The total segment operating margin was 23.3% in the fiscal fourth quarter, higher than the prior-year’s 17.9%. The improvement in margins was driven by higher sales which was partially offset by an unfavorable currency impact.
Segment Results
Intelligent Devices: Net sales amounted to $957 million during the fiscal fourth quarter, up 11.7% year over year. Segment operating earnings totaled $213 million compared with the year-earlier quarter’s $166 million. The segment operating margin decreased to 22.3% in the quarter from the year-ago quarter’s 19.4%.
Software & Control: Net sales rose 33% year over year to $657 million in the reported quarter. Segment operating earnings surged 90% year over year to $227 million. The segment operating margin was 34.5% compared with 24.2% in the year-earlier quarter.
Lifecycle Services: Net sales for the segment were $512 million in the reported quarter, up 12% year over year. Segment operating earnings totaled $55 million compared with the prior-year quarter’s $37 million. The segment operating margin was 10.7% in the reported quarter compared with the year-earlier quarter’s 8.1%.
Financials
As of the end of the fiscal 2022, cash and cash equivalents were around $491 million compared with $662 million as of the end of fiscal 2021. Total debt was around $3.84 billion at the end of fiscal 2022 compared with $3.98 billion at fiscal 2021-end.
Cash flow from operations in fiscal 2022 was $823 million compared with the prior-year’s fiscal $1,261 million. Return on invested capital was 15.2% as of Sep 30, 2022.
During fiscal 2022, ROK repurchased around 1.3 million shares for $301 million. As of the end of fiscal 2022, $1.3 billion was available under the existing share-repurchase authorization.
Fiscal 2022 Performance
For fiscal 2022, Rockwell Automation’s adjusted earnings were $9.49, which surpassed the Zacks Consensus Estimate of $9.40. It was 1% higher than the prior fiscal as higher sales and lower incentive compensation were partially offset by higher investment spending, higher tax rate, and a prior year favorable legal settlement. Including one-time items, the company’s earnings were $7.97 per share compared with $11.58 in fiscal 2021.
Total revenues advanced 11% year over year to around $7,760 million, which beat the Zacks Consensus Estimate of $7,750 million. Full-year orders were reported at more than $10 billion, marking a 20% increase year over year
Fiscal 2023 Guidance
Backed by solid backlog levels and demand as well as assuming supply-chain stabilization, Rockwell Automation expects strong double-digit earnings growth in fiscal 2023. It expects reported sales growth at 7.5-11.5% for fiscal 2023 and organic sales growth is projected at 9-13%. Adjusted earnings per share for fiscal 2023 is expected between $10.20 and $11.00.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -33.19% due to these changes.
VGM Scores
At this time, Rockwell Automation has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Rockwell Automation has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Why Is Rockwell Automation (ROK) Up 9.9% Since Last Earnings Report?
A month has gone by since the last earnings report for Rockwell Automation (ROK - Free Report) . Shares have added about 9.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Rockwell Automation due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Rockwell Automation Q4 Earnings & Sales Beat Estimates
Rockwell Automation reported adjusted earnings per share of $3.04 in fourth-quarter fiscal 2022 (ended Sep 30, 2022), surpassing the Zacks Consensus Estimate of $2.94. The bottom line surged 30% year over year on higher sales, which was somewhat offset by a higher tax rate and unfavorable currency impact.
Including one-time items, earnings came in at $2.91 per share in the fiscal fourth quarter compared with the prior-year quarter’s 67 cents per share.
Total revenues were $2,126 million, up 17.6% from the prior-year quarter. The top line beat the Zacks Consensus Estimate of $2,113 million. Organic sales in the quarter were up 20.5% and acquisitions contributed 1.9% to sales growth, while currency translation had a negative impact of 4.8%.
Operational Update
The cost of sales increased 14% year over year to around $1,240 million. Gross profit rose 23% year over year to $886 million. Selling, general and administrative expenses inched up 0.3% year over year to $449 million.
Consolidated segment operating income totaled $495 million, up 53% from the prior-year quarter. The total segment operating margin was 23.3% in the fiscal fourth quarter, higher than the prior-year’s 17.9%. The improvement in margins was driven by higher sales which was partially offset by an unfavorable currency impact.
Segment Results
Intelligent Devices: Net sales amounted to $957 million during the fiscal fourth quarter, up 11.7% year over year. Segment operating earnings totaled $213 million compared with the year-earlier quarter’s $166 million. The segment operating margin decreased to 22.3% in the quarter from the year-ago quarter’s 19.4%.
Software & Control: Net sales rose 33% year over year to $657 million in the reported quarter. Segment operating earnings surged 90% year over year to $227 million. The segment operating margin was 34.5% compared with 24.2% in the year-earlier quarter.
Lifecycle Services: Net sales for the segment were $512 million in the reported quarter, up 12% year over year. Segment operating earnings totaled $55 million compared with the prior-year quarter’s $37 million. The segment operating margin was 10.7% in the reported quarter compared with the year-earlier quarter’s 8.1%.
Financials
As of the end of the fiscal 2022, cash and cash equivalents were around $491 million compared with $662 million as of the end of fiscal 2021. Total debt was around $3.84 billion at the end of fiscal 2022 compared with $3.98 billion at fiscal 2021-end.
Cash flow from operations in fiscal 2022 was $823 million compared with the prior-year’s fiscal $1,261 million. Return on invested capital was 15.2% as of Sep 30, 2022.
During fiscal 2022, ROK repurchased around 1.3 million shares for $301 million. As of the end of fiscal 2022, $1.3 billion was available under the existing share-repurchase authorization.
Fiscal 2022 Performance
For fiscal 2022, Rockwell Automation’s adjusted earnings were $9.49, which surpassed the Zacks Consensus Estimate of $9.40. It was 1% higher than the prior fiscal as higher sales and lower incentive compensation were partially offset by higher investment spending, higher tax rate, and a prior year favorable legal settlement. Including one-time items, the company’s earnings were $7.97 per share compared with $11.58 in fiscal 2021.
Total revenues advanced 11% year over year to around $7,760 million, which beat the Zacks Consensus Estimate of $7,750 million. Full-year orders were reported at more than $10 billion, marking a 20% increase year over year
Fiscal 2023 Guidance
Backed by solid backlog levels and demand as well as assuming supply-chain stabilization, Rockwell Automation expects strong double-digit earnings growth in fiscal 2023. It expects reported sales growth at 7.5-11.5% for fiscal 2023 and organic sales growth is projected at 9-13%. Adjusted earnings per share for fiscal 2023 is expected between $10.20 and $11.00.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -33.19% due to these changes.
VGM Scores
At this time, Rockwell Automation has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Rockwell Automation has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.